Saturday, September 09, 2006

I’ve had the privilege of interviewing some interestingpeople here at IB. Recently, though, I was asked to be interviewed, by a very nice fellow with Health-Leaders. Seems they’ve been following our items on some insurance agent shenanigans, which dovetailed with their own investigations of same. The H-L folks got to wondering how the agent community was reacting to the story, and to the ethical ramifications of the situation itself.

Briefly, several agents (and agencies) agreed to help local school districts shop for their group insurance. They were paid a fee by these public entities, and charged with finding the best plans at the most attractive rates. Unbeknownst to the school districts, the agents were also paid commissions (and apparently bonuses) by the carriers, essentially getting paid twice for the same work. When the districts found out, they cried foul, and the agents now face disciplinary action (if not firing squads) by the State of Ohio.

The folks at Health-Leaders have been avidly following the money trail, and the legal one. Apparently, we’re one of a very few blogs that’s been paying much attention to this story, so they thought we’d be a good resource. They wanted to know how the agent community felt about how the Insurance Department handled the disciplinary aspect, and what we thought about the ethical ramifications of the process.

The first question was simple to answer: (sound of crickets chirping). That is, for the most part, this whole sordid mess has been under the radar, and/or ignored. There’s a reason for this: by and large, insurance agents are surprisingly good at avoiding reality, even when said reality threatens to directly impact our own wallets (and this story didn’t meet even that threshold).

The second question gets a little tougher: what, exactly, are the ethical (as opposed to the legal) issues in play here? Not being a lawyer, I’ll pass on the legal aspects; since I teach a Continuing Education course on insurance ethics (not an oxymoron, really!), I believe I’m qualified to weigh in on the ethical ones, at least from the agents’ perspective:

There really aren’t any.

In all of the brouhaha, I have not read that any school district or DOI representative have claimed that the agents did not do their job, or did an inadequate one. In fact, it appears that the districts were quite pleased with the results. Yes, the agents apparently “double-dipped,” which strikes me as incredibly stupid (not to mention, greedy), because it invites close inspection and engenders doubt. But stupid is not the same as unethical, as least insofar as the school districts were concerned.

One thing I’d like to make perfectly clear is that I hold no brief for the agents or their actions. Frankly, I find what they appeared to have done to be reprehensible, greedy and obnoxious. It bothers me that we’re even in the same industry. If the facts, once they are exposed in court, corroborate the media accounts, I hope that they are punished to the fullest extent of the law.

But it’s also important for folks to understand that ethics are something not to be taken lightly, nor interpreted “on the fly.” There are specific, identifiable principles at work, and I want to make sure that IB readers understand that most agents do take our positions of trust seriously.

I’ll let you know when the article gets published (forgot this was about my interview, didn’t ya?).

I’ve had the privilege of interviewing some interestingpeople here at IB. Recently, though, I was asked to be interviewed, by a very nice fellow with Health-Leaders. Seems they’ve been following our items on some insurance agent shenanigans, which dovetailed with their own investigations of same. The H-L folks got to wondering how the agent community was reacting to the story, and to the ethical ramifications of the situation itself.

Briefly, several agents (and agencies) agreed to help local school districts shop for their group insurance. They were paid a fee by these public entities, and charged with finding the best plans at the most attractive rates. Unbeknownst to the school districts, the agents were also paid commissions (and apparently bonuses) by the carriers, essentially getting paid twice for the same work. When the districts found out, they cried foul, and the agents now face disciplinary action (if not firing squads) by the State of Ohio.

The folks at Health-Leaders have been avidly following the money trail, and the legal one. Apparently, we’re one of a very few blogs that’s been paying much attention to this story, so they thought we’d be a good resource. They wanted to know how the agent community felt about how the Insurance Department handled the disciplinary aspect, and what we thought about the ethical ramifications of the process.

The first question was simple to answer: (sound of crickets chirping). That is, for the most part, this whole sordid mess has been under the radar, and/or ignored. There’s a reason for this: by and large, insurance agents are surprisingly good at avoiding reality, even when said reality threatens to directly impact our own wallets (and this story didn’t meet even that threshold).

The second question gets a little tougher: what, exactly, are the ethical (as opposed to the legal) issues in play here? Not being a lawyer, I’ll pass on the legal aspects; since I teach a Continuing Education course on insurance ethics (not an oxymoron, really!), I believe I’m qualified to weigh in on the ethical ones, at least from the agents’ perspective:

There really aren’t any.

In all of the brouhaha, I have not read that any school district or DOI representative have claimed that the agents did not do their job, or did an inadequate one. In fact, it appears that the districts were quite pleased with the results. Yes, the agents apparently “double-dipped,” which strikes me as incredibly stupid (not to mention, greedy), because it invites close inspection and engenders doubt. But stupid is not the same as unethical, as least insofar as the school districts were concerned.

One thing I’d like to make perfectly clear is that I hold no brief for the agents or their actions. Frankly, I find what they appeared to have done to be reprehensible, greedy and obnoxious. It bothers me that we’re even in the same industry. If the facts, once they are exposed in court, corroborate the media accounts, I hope that they are punished to the fullest extent of the law.

But it’s also important for folks to understand that ethics are something not to be taken lightly, nor interpreted “on the fly.” There are specific, identifiable principles at work, and I want to make sure that IB readers understand that most agents do take our positions of trust seriously.

I’ll let you know when the article gets published (forgot this was about my interview, didn’t ya?).